Same-rank claims exceed the proceeds: Pro-rata calculation for the distribution

Section 218(1) EO makes pro-rata satisfaction subject to two conditions: the claims must have the same priority and the distribution fund must be insufficient to satisfy them in full. The claims, together with ancillary charges, are then taken into account in proportion to their total amounts.

The provision addresses a calculation within an established priority level. It does not replace the prior priority review. A claim with higher priority does not become a same-rank claim merely because the fund is limited. A lower-priority claim is not included in the same calculation simply because it was also filed.

The distribution order should therefore identify the priority level first. Only the total amounts assigned to that level are added. The available fund is compared with that sum. Any surplus or shortfall should be shown separately for each affected priority level.

The nominal principal claim is not the only relevant figure. Section 218(1) EO refers to claims together with ancillary charges and uses their total amounts. For each claim it must therefore be possible to trace which interest, costs or other ancillary positions are included in the distribution status.

The total amount must be distinguished from the amount the creditor ultimately receives. The total amount is the calculation figure before the pro-rata reduction. The amount paid is determined only after dividing the individual total amount by the sum of all same-rank total amounts and multiplying the resulting share by the available fund.

Open or disputed positions require their own review trail. If the distribution file treats them differently from the claim filing, the difference must remain visible. A calculation with precise percentages is not reliable when its underlying total amounts have not been established.

Start with a priority list and mark the relevant level. For each same-rank claim, keep a separate calculation sheet: creditor, file reference, principal amount, ancillary charges taken into account, total amount and any objection. The sum must match the amount assigned to that priority level in the distribution file.

The formula is: satisfied amount = available fund x individual total amount / sum of the total amounts in the same priority level. If rounding is required, record how the final cent or smallest unit was allocated. The sum of all satisfied amounts must not exceed the available fund.

The article on distribution of the highest bid covers the preceding claim filing, priority review and objection. The pro-rata calculation assumes that this basis has already been clarified or sufficiently established in the individual distribution file.

The pro-rata calculation under section 218(1) EO is limited to genuinely same-rank claims. It does not determine whether a claim belongs in a particular priority level or whether it was properly filed and supported. Those questions must be resolved first.

A simultaneous mortgage also does not automatically produce one pro-rata calculation across several properties. The allocation of the secured claim between the main and secondary property, and the specific distribution, require a separate review. The article on simultaneous mortgages addresses that distinction.

For practical control, it is therefore not enough to place two claims with the same priority note next to each other. The decisive elements are the established total amounts, the available fund and the calculation line that explains each allocation.